Chennai
Food delivery major Swiggy on Wednesday said it has set up a total of 1,000 cloud kitchens for restaurants listed on its platform across 14 cities. The Bengaluru-based food ordering platform said it has so far invested Rs 175 crore towards setting up and running these kitchens.
It will invest an additional Rs 75 crore to expand the cloud kitchens to 12 new cities by March 2020, a statement from the company said. “Swiggy has always maintained that cloud kitchens will be the future of food delivery. Very soon, India will have the second-highest number of cloud kitchens in the world, only next to China,” said the firm’s Chief Executive for New Supply vertical Vishal Bhatia.
The initiative of setting up cloud kitchens has helped grow restaurant businesses and create employment opportunities in metros, as well as Tier-II and III cities, he stressed. In an email interview with DTNext, Bhatia spoke about the platform’s cloud kitchens in Chennai and the future of food delivery. Cloud kitchens are physical kitchens that only take orders through online food delivery platforms and offer no dine-in facility, thereby cutting down the investment costs. Through its ‘Swiggy Access’ initiative, which began in 2017, the company has allowed small, medium and large restaurants to expand to more locations within their city and to newer regions through cloud kitchens.
For instance, cloud kitchens have allowed local restaurants like Buhari and Kumarakom to serve cities like Coimbatore. Likewise, eateries like Biryani Blues from New Delhi are now accessible in Chandigarh.
Cloud kitchens run by Swiggy in Chennai
Bhatia tells us, “Swiggy has over 125 partner kitchens through Swiggy Access across 16 locations in the city. Our 500th partner cloud kitchen was opened in the city a few months ago. Brands like Zaitoon, Fireflies Night Restaurant, Ghuma Ghuma Lu, Ratna Cafe, Loiee Mithai and Rasoi, Pulusu are part of the city’s Swiggy Access network.”
Convenience to restaurants, diners and delivery platforms
According to Bhatia, the food delivery industry has undergone transformative changes over the last three years. “This is true in the case of India, which has leapfrogged the widespread restaurant dining culture that was prevalent in international markets. Factors like traffic, parking woes and hectic schedules make consumers turn to delivery for convenience,” he says.
While demand is on the rise, India currently faces a big supply gap where consumers in metros and Tier-II, III cities do not always have a wide selection vis-à-vis cuisines or quality brands. Bhatia emphasises that restaurant expansion via cloud kitchens is simple as it removes major barriers like setting up dine-in facilities at prime locations, hiring and retaining staff, customer acquisition, market fit etc. “Cloud kitchens are easier to set up and run and are streamlined for delivery which helps in improving consumer experience with quicker deliveries. With the help of technology and data science, we have made it possible for even smaller restaurants to run a high-volume delivery business,” he tells us.
Locations being eyed for future investment in cloud kitchens
Bhatia strongly believes that delivery-only kitchens will be the future of food delivery. He says, “With Swiggy Access, we’re building hundreds of pods to help thousands of small, medium and large restaurants expand to newer locations. In an industry first, the initiative is also enabling inter-city expansion for its restaurant partners. And, many restaurants from Tier-II cities have also expanded into Tier-I cities, giving them wider reach and brand recall.”
For instance, Fireflies from Coimbatore, which is now available in Chennai, plans to continue expanding to Hyderabad, Vizag and Pune. Swiggy is investing significant capital and resources to continue expanding Access kitchens across the country and will be present in over 25 cities, including Tier-II and III cities such as Guwahati, Tiruppur, Bareilly, Surat and Kochi, by March 2020.
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